OUCH!:The Airline Bailout

Eleven days after the terrorist attacks of Sept. 11, Congress rushed through a $15 billion bailout of the airline industry. More than three weeks later, nothing has been done to address the needs of more than 140,000 airline workers whose jobs have been imperiled. The larger travel and tourism sector is reeling. Of the two million people employed by the hotel industry, currently half are either laid off or working just one or two days week. Travel agency bookings are running at 40 percent of last year's levels, and that industry estimates losing $1.36 billion in the four weeks since the terror attacks of Sept. 11.

While no one can doubt that it was critical to compensate the airline companies for the losses they suffered, many legitimate questions have been raised about how Congress has set its priorities in addressing this crisis. One vocal critic is Senator Peter Fitzgerald, a Republican from Illinois who was the sole senator to vote against the airline bailout. "Other industries don't have the raw political clout the airlines have," he told a group of travel industry executives and labor leaders who came to Congress last Friday to seek aid. "The payouts to the airline industry were grossly excessive," Fitzgerald added. "The only people who got bailed out were the shareholders. The one million airline employees were left twisting in the wind."

How did the airlines get to the head of the bailout line? And how did they end up getting more money out of taxpayers than they lost in the three days the nation's airports were shut down? By moving fast and without shame to deploy a crack army of lobbyists on Capitol Hill and by using all the access and influence that could be bought with $65 million in campaign contributions over the last 11 years.

The airlines have Washington wired. According to a recent report by Public Citizen, current or recent lobbyists for their interests include Linda Hall Daschle (wife of Senate majority leader Tom Daschle); Haley Barbour (former Republican National Committee chair), Harold Ickes (former Clinton deputy chief of staff), Ken Duberstein (former Reagan chief of staff and a crony of Colin Powell), Nick Calio (now President Bush's congressional liaison) and former Senators Dale Bumpers and Bob Packwood.

A close look at the airline bailout raises many questions. The General Accounting Office, reviewing data provided by the airlines and their lobby, the Air Transport Association, found that the industry overstated its anticipated losses through Dec. 31 by as much as $5 billion. For example, the airlines assumed no labor savings even though they were laying off tens of thousands, and lowballed their fuel savings as well.

Other critics have also noted that there was no way to tell how much of the airline bailout would also go to prop up heavily indebted airlines like US Airways, America West and Northwest which were tottering toward bankruptcy well before Sept. 11. And unlike the government bailout of Chrysler two decades ago, the airlines‚ stakeholders were not asked to make any concessions this time around. Banks did not have to forgive or stretch out any airline debts, for example.

But few in Congress want to seriously review the bailout's terms. It's not for nothing that stock analysts are now rating many airlines as a "strong buy."

Eventually Congress may offer, if not a bailout, at least some special help to the lodging and tourism industry as well. After all, that industry also plays the Washington money game, contributing over $24 million to federal parties and candidates since 1990, according to the Center for Responsive Politics. Air transport unions gave another $11 million during the same period.

But as the taxpayers who must pay for these things, we should ask, is Congress writing legislation that helps out those that need it most, or are its actions skewed by campaign contributors? In the wake of the events of Sept. 11, we all want to help, but we want to make sure that the distribution of this aid is just, based on need and not on Federal Election Commission reports. Even those who play the campaign money game, like those in the tourism industry, should ask whether they are on an even playing field, with the airline lobbying juggernaut so entrenched in Washington. If we want our tax dollars to be spent wisely in a time of national crisis, if we want to be assured that the sacrifices to come will be shared fairly, we need to liberate Members of Congress from their corrupting dependence on private campaign contributions. We need comprehensive campaign finance reform.

OUCH! is a regular email bulletin on how private money in politics hurts average citizens, published by Public Campaign, a non-partisan, non-profit organization devoted to comprehensive campaign finance reform.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

alternet logo

Tough Times

Demand honest news. Help support AlterNet and our mission to keep you informed during this crisis.